New Economics Papers
on Efficiency and Productivity
Issue of 2014‒07‒13
sixteen papers chosen by

  1. R&D, spatial proximity and productivity at firm level: evidence from Italy By Cardamone, Paola
  2. Decomposing Bjurek Productivity Indexes into Explanatory Factors By Diewert, Erwin; Fox, Kevin J.
  3. Do firms benefit from university research? Evidence from Italy By Cardamone, Paola; Pupo, Valeria; Ricotta, Fernanda
  4. Knowledge Spillovers, ICT and Productivity Growth By Corrado, Carol; Haskel, Jonathan; Jona-Lasinio, Cecilia
  5. Non-Radial Directional Performance Measurement with Undesirable Outputs By Chen, Po-Chi; Yu, Ming-Miin; Chang, Ching-Cheng; Managi, Shunsuke
  6. Agricultural extension and technical efficiency of tea production in northeastern Vietnam. By Phu Nguyen-Van; Nguyen To-Thea
  7. Employee Trust and Workplace Performance By Brown, Sarah; Gray, Daniel; McHardy, Jolian; Taylor, Karl
  8. Untitled Land, Occupational Choice, and Agricultural Productivity By Chaoran Chen
  9. Firms Size and Directed Technological Change. By Antonelli, Cristiano; Scellato, Giuseppe
  10. A Hybrid Approach to Estimating the Efficiency of Public Spending on Education in Emerging and Developing Economies By Francesco Grigoli
  11. European Productivity, Innovation and Competitiveness: The Case of Italy By Andrew Tiffin
  12. Consequence of Job Satisfaction Factors on the Productivity Level of Operating Core By Baaren, Terence; Galloway, Cornelia
  13. Trade, Innovation and Productivity: A Quantitative Analysis of Europe By Crespo, Aranzazu
  14. Convergence to the Managerial Frontier By Maloney, William F.; Sarrias, Mauricio
  15. Financial Liberalisation And Determinants of Profitability of Commercial Banks in India By Naidu, V.Nagarajan; Nair, Manju S
  16. Are organizational innovation practices complements or substitutes for technological innovation performance? By Caroline Mothe; Uyen T. Nguyen-Thi; Phu Nguyen-Van

  1. By: Cardamone, Paola
    Abstract: The aim of this paper is to evaluate the effect of research and development (R&D) on productivity by taking into account productivity spillovers. To this end, by using a sample of Italian manufacturing firms provided by the Xth UniCredit-Capitalia survey (2008), which covers the period 2004-2006, we have analyzed the role of R&D in firm productivity by using a spatial autoregressive model. In so doing, we have allowed the total factor productivity (TFP) of each firm to be affected by the TFP of nearby firms. Results show that R&D play an important role in Italian firm productivity. Moreover, we find evidence in favor of productivity spillovers across firms due to spatial proximity. In addition, intrasectoral R&D spillovers seem to have a relevant effect on firm productivity, while intersectoral R&D spillovers do not have a significant effect.
    Keywords: R&D, TFP, spillovers, spatial econometrics, Italian manufacturing firms
    JEL: C21 D24 O33
    Date: 2014–06–15
  2. By: Diewert, Erwin; Fox, Kevin J.
    Abstract: Caves, Christensen, Diewert introduced Malmquist output, input and productivity indexes into production theory in a systematic way. This paper revisits the debate on how to decompose Bjurek’s concept of a Malmquist productivity index into explanatory factors, with a focus on extracting technical progress, technical efficiency change, and returns to scale components. In order to define these components, a reference technology is required. The paper does not make any convexity assumptions on the reference technology but instead follows the example of Tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions. The existence and properties of the underlying distance functions of the productivity decomposition are proven under relatively unrestrictive assumptions. The paper provides for the first time a theoretical justification for the geometric average form of the Bjurek productivity index.
    Keywords: Productivity indexes, Malmquist Moorsteen Bjurek indexes, technical efficiency, technical progress, returns to scale, Data Envelopment Analysis, Free
    JEL: C43 D24 E23
    Date: 2014–06–30
  3. By: Cardamone, Paola; Pupo, Valeria; Ricotta, Fernanda
    Abstract: The aim of this paper is to assess the effect on firm total factor productivity of the university research. Since the impact of universities on firms’ performance is subtle and complex, we verify whether territorial context, sector and firm size may influence this relationship. Results show that university R&D does not seem to affect Italian firm productivity. However, if we consider geographical location and sector, we find that university activities have a positive effect on the performance of firms located in the North of Italy or operating in the specialised supplier sector. Several robustness checks confirm the significant role played by universities above all in the North of Italy. The policy implications of these findings are discussed.
    Keywords: University, R&D, Total Factor Productivity
    JEL: C21 D24 O30
    Date: 2014–04–30
  4. By: Corrado, Carol (The Conference Board); Haskel, Jonathan (Imperial College London); Jona-Lasinio, Cecilia (ISTAT, Rome)
    Abstract: This paper looks at the channels through which intangible assets affect productivity. The econometric analysis exploits a new dataset on intangible investment (INTAN-Invest) in conjunction with EUKLEMS productivity estimates for 10 EU member states from 1998 to 2007. We find that (a) the marginal impact of ICT capital is higher when it is complemented with intangible capital, and (b) non-R&D intangible capital has a higher estimated output elasticity than its conventionally-calculated factor share. These findings suggest investments in knowledge-based capital, i.e., intangible capital, produce productivity growth spillovers via mechanisms beyond those previously established for R&D.
    Keywords: productivity growth, economic growth, intangible capital, intangible assets, ICT, spillovers
    JEL: O47 E22 E01
    Date: 2014–06
  5. By: Chen, Po-Chi; Yu, Ming-Miin; Chang, Ching-Cheng; Managi, Shunsuke
    Abstract: The objective of this paper is to provide a comprehensive efficiency measures to estimate the performances of OECD and non-OECD countries. A Russell directional distance function that appropriately credits the decision making unit not only for increase in desirable outputs but also for the decrease of undesirable outputs is derived from the proposed weighted Russell directional distance model. The method was applied to a panel of 99 countries over 1991 and 2003. This framework also decomposes the comprehensive efficiency measure into individual input/output components’ inefficiency scores that are useful for policy making. The results reveal that the OECD countries perform better than the non-OECD countries in overall, goods, labor and capital efficiencies, but worse in bad and energy efficiencies.
    Keywords: data envelopment analysis, directional distance function, undesirable output, Russell measure, slacks-based model
    JEL: E27 Q0 Q40 Q43
    Date: 2014
  6. By: Phu Nguyen-Van; Nguyen To-Thea
    Abstract: This study uses the stochastic production frontier to analyze technical efficiency of tea production in northeastern Vietnam. Our study estimated that the average technical efficiency of tea production is very low, only about 32%. Technical efficiency can be improved by having a training on sale skills whereas it can be negatively a?ected by access to information on tea market. The results indicated that there are a big potential for improving technical efficiency in tea production by using the available inputs and technology. For the purpose of improving efficiency, efforts should be made on agricultural extension (keeping the current form of training on sale skills, modifying the provision of information on tea market). Producers are also recommended to be more careful on the adoption of tea variety for their cultivation.
    Keywords: Agriculture extension, technical efficiency, stochastic frontier, translog, tea production.
    JEL: C21 D24 Q12 Q18
    Date: 2014
  7. By: Brown, Sarah (University of Sheffield); Gray, Daniel (University of Sheffield); McHardy, Jolian (University of Sheffield); Taylor, Karl (University of Sheffield)
    Abstract: We explore the relationship between employee trust of managers and workplace performance. We present a theoretical framework which serves to establish a link between employee trust and firm performance as well as to identify possible mechanisms through which the relationship may operate. We then analyse matched workplace and employee data in order to ascertain whether the average level of employee trust within the workplace influences workplace performance. We exploit the 2004 and 2011 Work Place and Employee Relations Surveys (WERS) to analyse the role of employee trust in influencing workplace performance in both pre and post recessionary periods. Our empirical findings support a positive relationship between three measures of workplace performance (financial performance, labour productivity and product or service quality) and employee trust at both points in time. We then exploit employee level data from the WERS to ascertain the determinants of employee trust as well as how trust is influenced by measures taken by employers to deal with the recent recession. Our findings suggest that restricting paid overtime and access to training potentially erode employee trust. In addition, we find that job or work reorganisation experienced at either the employee or organisation level are associated with lower employee trust.
    Keywords: employee trust, financial performance, labour productivity, product quality
    JEL: J20 J50
    Date: 2014–06
  8. By: Chaoran Chen
    Abstract: The prevalence of untitled land in poor countries helps explain the agricultural productivity gap between rich and poor countries. Since untitled land cannot be rented or traded across farmers, it creates not only land market misallocation, but also distortions in occupational choice. I build a two-sector general equilibrium model to quantify the impact of untitled land. My results indicate that larger shares of untitled land lower agricultural productivity. If 80% of all land is untitled and distributed equally across farmers, agricultural productivity drops by 27.7%. The productivity drop is even larger when the distribution of untitled land is skewed.
    Keywords: Agricultural Productivity, Untitled Land, Misallocation, Occupational Choice.
    JEL: E0 O11 O13 O4
    Date: 2014–07–04
  9. By: Antonelli, Cristiano; Scellato, Giuseppe (University of Turin)
    Abstract: The analysis of the characteristics of firms helps understanding the causes and the consequences of the direction of technological change. Firms differ substantially with respect to the type of technological knowledge they can generate and exploit with the introduction of technological innovations. This in turn has major effects on the direction of technological change they are able to introduce. Large firms able to command the recombinant generation of codified knowledge with a strong scientific base are more likely to introduce neutral technological changes that consist in a shift effect of production functions. Small firms that rely more on tacit and external knowledge are more likely to rely on technologies directed towards the most intensive use of locally abundant production factors. The effects of this difference in terms of the resulting total factor productivity growth are important and can be grasped only when the changes of output elasticity of production factors in growth accounting are properly appreciated. The empirical evidence for a sample of 6600 Italian firms observed during the years 1996 - 2005 confirms that large firms introduced mainly neutral technological changes while small firms with lower levels of profitability introduced biased technological changes.
    Date: 2014–06
  10. By: Francesco Grigoli
    Abstract: The measurement of the efficiency of public education expenditure using parametric and non-parametric methods has proven challenging. This paper seeks to overcome the difficulties of earlier studies by using a hybrid approach to measure the efficiency of secondary education spending in emerging and developing economies. The approach accounts for the impact of the level of development on education outcomes by constructing different efficiency frontiers for lower- and higher-income economies. We find evidence of large potential gains in enrollment rates by improving efficiency. These are largest in lower-income economies, especially in Africa. Reallocating expenditure to reduce student-to-teacher ratios (where these are high) and improving the quality of institutions (as measured by the "governance effectiveness" indicator in the World Bank's Governance Indicators database) could help improve the efficiency of education spending. Easing the access to education facilities and reducing income inequality (as measured by the Gini coefficient) could also help improve efficiency.
    Keywords: Government expenditures;Education;Africa;Emerging markets;Developing countries;Cross country analysis;education spending, educational outcomes, public education, public expenditure, education sector, school enrollment, education facilities, education outcomes, educational output, completion rates, access to education, educational efficiency, expenditure efficiency, schooling, education systems, efficiency of government expenditure, student educational outcomes, education indicators, public spending, school enrollments, health expenditure, returns to education, education services
    Date: 2014–01–30
  11. By: Andrew Tiffin
    Abstract: In Italy, price-based competitiveness measures are not always an accurate predictor of trade outcomes. This paper offers a more comprehensive assessment of Italian competitiveness, focusing on the role of innovation and the evolution of Italy’s export market share. Overall, Italy maintains a high-quality export mix, and the adaptability of small-scale specialized firms is still a source of strength. But, small firm size is becoming less of an asset, and even the most innovative sectors are weighed down by the structural barriers that have depressed productivity more broadly. Italy’s future competitiveness will depend on full implementation of a comprehensive structural-reform agenda.
    Keywords: Global competitiveness;Italy;Exports;Productivity;Labor costs;Italy, competitiveness, exports, shift share analysis, CMSA
    Date: 2014–05–09
  12. By: Baaren, Terence; Galloway, Cornelia
    Abstract: The purpose of this article is to uncover the relationship of job satisfaction factors on the productivity level of operating core of manufacturing firm in textile mill. The theoretical approach that has been in this study to examine job satisfaction is Hertzberg’s two-factor theory of motivation, Maslow’s hierarchy of needs theory. The Minnesota Satisfaction Questionnaire (MSQ) has been used. With the confidence interval of 95% and after analyzing the data and computing the correlation in SPSS software, researcher got the significance value of 0.043. The value of 0.043 is significant at 5% significance level. So therefore the researcher has rejected the null hypothesis and accepted the alternative hypothesis. Hence the results showed that there is a relationship between satisfaction factors and productivity.
    Keywords: Productivity
    JEL: M11 M16
    Date: 2014–07–05
  13. By: Crespo, Aranzazu
    Abstract: This paper proposes a trade model with heterogeneous firms that decide not just whether and how much to export but also whether and how much to innovate. Incorporating both the extensive and intensive margins of trade and innovation leads to different possible equilibria. Depending on how costly trade is relative to innovation, medium-productivity firms may either export without innovating, innovate without exporting, do both or do neither. The impact of trade on aggregate productivity and welfare depends crucially on the equilibrium the economy is in. When lowering the variable costs of trade, the welfare effects arising from reallocating market shares across firms may be non-negligible, and when lowering the fixed cost of trade, aggregate productivity need not always increase. After calibrating the model to five European countries, we show that the different equilibria are plausible, and provide quantitative evidence that supports the predictions of our theory.
    Keywords: Process Innovation, Firm Heterogeneity, Trade Policy
    JEL: F12 F13 O24 O31
    Date: 2012–10
  14. By: Maloney, William F. (World Bank); Sarrias, Mauricio (Cornell University)
    Abstract: Using detailed survey data on management practices, this paper uses recent advances in unconditional quantile analysis to study the changes in the within country distribution of management quality associated with country convergence to the managerial frontier. It then decomposes the contribution of potential explanatory factors to the distributional changes. The US emerges as the frontier country, not because of on average better management, but because its best firms are far better than those of its close competitors. Part of the process of convergence to the frontier across the development process represents a trimming of the left tail, much is movement of the central mass and, for rich countries, it is actually the best firms that lag the frontier benchmark. Among potential explanatory variables that may drive convergence, ownership and human capital appear critical, the former especially for poorer countries and that latter for richer suggesting that the mechanics of convergence change across the process. These variables lose their explanatory power as firm and average country management quality rises. Hence, once in the advanced country range, the factors that improve management quality are less easy to document and hence influence.
    Keywords: management practices, convergence, development, quantile regression, RIF decomposition
    JEL: C21 L2 M2 O33 O47
    Date: 2014–06
  15. By: Naidu, V.Nagarajan; Nair, Manju S
    Abstract: Financial liberalisation efforts since 1991 have made perceptible impacts on the profitability of commercial banks in India with varying levels between public and private sectors. One of the objectives of the reform measures is to influence and change in the trends of determinants of profitability of banks towards the attainment of higher levels of profit. The regulated credit flow region wise and sector wise, restriction on the use pattern of deposit mobilised, prudential accountancy norms for asset classification and capital adequacy were some of important factors which acted as a drag on the profability of banks. The financial liberalisation measures were targeted to reverse these identified factors for maintaining the financial viability of banks. The trends on profit and profitability unequivocally proved the significant positive impacts of reform measures on both public and private sector banks. However, the performance improvement with respect to profitability among public sector banks particularly SBI group was astounding. The identified determinants of profitability of all bank groups have changed to the direction favourable for its improvements as explicitly desired in financial liberalisation measures. However, in this process of singled focussed leap towards profit, the social objectives of banking including priority sector lending and branch expansion were turned to be casualty. The withdrawal of public sector banks from their social obligation was not compensated by any other mechanism and this unfilled gap may have the possibility of opening up of another pandoras box of financial exclusion.
    Keywords: financial liberaliation, commercial banks, profitability
    JEL: G21
    Date: 2014–07–08
  16. By: Caroline Mothe; Uyen T. Nguyen-Thi; Phu Nguyen-Van
    Abstract: We empirically investigate the pattern of complementarity between four organizational practices. Firm-level data were drawn from the Community Innovation Survey (CIS) carried out in 2008 in Luxembourg. Supermodularity tests confirm the crucial role of organizational innovation in raising firms’ technological innovation. The pattern of complementarity between organizational practices differs according to the type of innovation, i.e. product or process innovation, but also according to whether the firm is in the first stage of the innovation process (i.e. being innovative or not) or in a later stage (i.e. innovation performance in terms of sales of new products).
    Keywords: Complementarity, Organizational innovation, Substitution, Supermodularity, Technological innovation.
    JEL: D22 O32
    Date: 2014

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